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tv   [untitled]    November 9, 2012 3:00pm-3:30pm PST

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million, where we had $4.2 million in grant funding. so, we got a $5 million project for $1 million out of pocket. we got that done on time, got our first ship connected the end of 2010. by connecting at the end of 2010, we beat out the other california ports and had the first functional shore side power system for cruise ships in california. for the americas cup, though, as you know, they're using pier 27. we're also doing the construction of the cruise terminal at pier 27. for mitigation for taking this out of service for those two years, we needed to construct shore side power at the dry dock. the environmental benefit of shore side power for both cruise ships and at the dry dock is huge. i just put up a few numbers
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here. a typical cruise ship in the 8 to 9 hours they're at dock and connected saves 17 tons of fuel that they would have consumed, which -- and burning that fuel would have produced approximately 51 tons of carbon dioxide and 140 pounds of diesel particulate. diesel particulate, 140 pounds doesn't sound like a lot, but from an air quality perspective that's huge. diesel particulates are carcinogenic. that's much more important than the carbon dioxide which as you know is the global warming issue. i made a rough estimate for similar numbers for the matthew perry, which will be in dry dock for 24 days total. that ship wouldn't have been running its engines, we would have needed -- the shipyard would have needed to bring in
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diesel generatorses to power the ship. i assumed old dirty diesel generators, which would have burned 72 tons of fuel over those 24 days, 217 tons of c.o.2, and almost 290 pounds of diesel pm. so, again, significant numbers. we've also, in addition to investing in shore side power at the dry dock, we've also invested in dredging. most recently in 2011 to ensure there's deep enough draft to get vessels into the dry dock, prior to that in 2008 we invested with princess and bae and upgrades to the dry dock to allow it to take the largest cruise ships as pictured here. we're working now with the army corps to get federal funding to dredge more central basin.
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again, it provides increased and continued access to the dry dock and other facilities at the shipyard. the goal is more jobs and more revenue. the construction of these projects themselves employ people, bae in building the shore side power, expended almost 8,000 hours of their own labor. there is additional labor expended by subcontractors in both the design and construction of that project. this is a $5.7 million project funded by the city and the port. and once it's up and going for a while and we meet electricity usage goal, the puc then will rebate the port $1.5 million. so, the dredging is -- dredging
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is kind of the unseen -- it is the unseen component of port maintenance. but it has a real effect. it enables our cruise ships to come in, in this particular case, it enables ships to continue to come into the dry dock. this slide, the small illegible numbers are the data that the big white numbers at the bottom are based on. this is the work that would not have been able to come into the dry dock if we had not done the dredging a little over a year ago in 2011. grand total of almost $1.6 million of additional rent that came into the port that we would not have seen, and $48 million worth of projects that the shipyard could not have done without that $2 million worth of dredging. so, the investments over the last few years have really paid off.
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i'm going to come back to that one. looking at the overall trends, it's been increasing revenues for the last five years, beginning with the dry dock 2 expansion and continuing with our investments in the central basin and the shore side power. the numbers on the blue columns are overall gross yard revenues. the green numbers on top which looks like a small amount, but actually isn't, is the net port revenue, which is increased from little over $900,000 to $1.8 million. so, we've doubled our net revenue in the course of five years. in terms of labor, it's a lot of labor. the vertical axis here is man-hours or person hours, if you'll excuse me, of labor. massive numbers of people come to work at the shipyard when
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there's a ship there. a good portion of that is union labor that's employed directly by bae. they also have subcontractors come in for specialized work. the white numbers on the columns represent the number of union workers showing up every day for each one of these jobs. so, we're looking at anywhere from 130 to 300 workers showing up every day because she's ships have come into the dry dock for work. and, so, basically we've invested, we've partnered with bae and both invested and we've created more jobs, more good union jobs here at the port of san francisco coming out of our maritime business. we've also increased port revenues through that. and equally importantly, we've cleaned up the ports there in the process. so, it's been a win all the way
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around, a three-way win. and with that, i'll take questions. >> [inaudible]. >> just a couple very quick, james wright. this is unique. working with the port of san francisco, i've been here five years now. i can't believe that. i've been here five years now. and working with the port of san francisco, the relationship that the shipyard has with the port of san francisco is working to everybody's benefit. the yard -- we've grown -- nobody's grown 65% in revenue in the last five years. it's not happening. the shipyard has, and that goes directly to jobs. i mean, we've got a lot of people. we're now at a point where we're having discussions with the union saying, where are you going to get us the additional -- where do we train the guys that we need to do to bring this work on?
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all of this is based on a public-private partnership with the port of san francisco and the shipyard. the dry dock expansion, allowed us to do the cruise ships we now do. the dredging has allowed us to bring in the ships we now do. [speaker not understood] coming through, we're now able to do ships for the navy seal of command that we couldn't do at all. the u.s. government is now actually scheduling ships to the san francisco yard based on the availability of the dry dock. we've had discussions yesterday about when is the richard burt coming in. richard burth is another very large project like the matthew perry, like the alan shepherd. there's only two dry dockses in the pacific basin that can pick them up, one is in guantanamo, one -- guam and one is in san francisco. i have to say thank you to the port of san francisco for the hard work and dedication of the teams there and the vision that they have for the shipyard and for the industry.
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i mean, monique's cruise, monique's teams are without equal. honest to goodness, it has really been a meerctionv you are to work with them and i look forward to the things we're moving forward on. the yard, san francisco, we're going to have one of the busiest years the yard has ever had, period, end of story. we're growing in a very tough market and we're growing in a tough market in no small part due to the vision and dedication of port of san francisco. i do appreciate it. and the guys who work at the yard appreciate it. good guys, doing hard work, getting union scale, making money, paying for their families, kids, and i mean, that doesn't happen by accident. that's a lot of hard work and i have to say it's a lot of hard work by the folks and the teamwork put together by the port of san francisco. i do appreciate it. thank you. >> is there any further public comment? i would just like to say congratulations [inaudible]. [laughter]
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thank you. [speaker not understood]. [laughter] >> is there any other comments or questions from other commissioners? i think, kim, you may have said it for all of us. congratulations. >> thank you. >> item 8, request approval of a proposal by the blackrock arts foundation to retroactively extend the port commission approved temporary installation of public art located near mission street on the east side of the embarcadaro, on the plaza between the agriculture building and pier 14, by five months until march 7, 2013. >> can i have a motion to move? >> so moved. >> second. >> and the winner is? >> is there any public comment? all in favor? >> aye. >> resolution number 12-8 3 has passed. >> commissioners with your permission, i'm reading item 9a and 9b together. >> yes.
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>> item 9a is request approval of a second amendment to lease no. l-15169 -- located at pier 9 to its current lease for use of office space [speaker not understood]. item 9b, request approval of mutual termination agreement with dna direct, a delaware corporation, of lease no. l-14871 located at pier 9, suite 105 at the foot of broadway and the embarcadaro. >> good afternoon, commissioners, jeffery, the port's leasing manager. as you may represent, september 11 i brought in the first audit lease to the commission for approval for about 8500 square feet for their workshop and some associated office. the reason of that space need
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was they purchased a company, web-based company called instructables. so, it's a workshop and again associated office. recently they came back to the port, fortunately, with another space need. this time requesting about 18,500 square feet of office space. and to accommodate them, we started negotiations and we've developed a first amendment and second amendment. the second amendment is before you for approval because it does exceed the business parameter sound and the port's leasing policy. the lease provides, again, for about 18,000 square feet, a term of 10 years. there is a minimum guaranteed investment of about $7 million. $3 million will be directed towards core and shell improvements. autodesk will receive a rent
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credit in the amount that is changed somewhat from your staff report, about $2.9 million. the port will realize about 55,000 per month before any deductions. if you net everything, what we're getting now, there actually is a net increase in the rent. two of the offices are currently occupied. one is d & a direct. i sought commission approval a few years ago for that lease and now they were just purchased by a larger company. so, they're interested in getting out of their lease. and it was very good timing to approach autodesk to see if they want to include that. so, we've included that into the lease. it does -- it's outside of the commission parameter, so it does require your approval.
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there's no downside in revenue. autodesk will be paying very similar rates than that of d & a direct. the other is cab shop properties, smaller tenant. they have about 2000 square feet. we have approached them to relocate them pursuant to the executive director's ability under certain -- under a resolution. so, they have agreed to move to suite 105. the issue there is we are working out some minor details with the amount of the build out of that office space. so, given that i request your approval subject to the board of supervisors for the second amendment. and i also request your approval of the mutual termination agreement between the port and d & a direct. i'm happy to answer any questions. >> so moved.
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>> second. >> is there any public comment? all in favor? >> aye. >> resolution number 12-79 and resolution 12-08 have passed. >> item 9c, request approval of direct negotiations and lease no. l-15199 with the black coalition on aids, a not-for-profit corporation, for approximately 7,369 square feet of a freestanding building and approximately 4,235 square feet of paved land located at 601 cesar chavez street for use as offices, a restaurant and other services relating to bca's mission, for a term of 60 months, with one 36-month term extension option at port's sole discretion. >> commissioners, jeffery bower, port leasing manager, seeking your approval as read
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by the commission secretary. the black coalition and aids, bca is dedicate today reducing the health disparities in the black community, particularly the spread of hiv and aids. bac was founded in 1986 with the idea of promoting health education advocacy services in the black community. in september 2012, bca made an unsolicited offer to the port to lease 601 cesar chavez for the relocation of their administrative offices and other activities related to bca's mission. and possibly develop a restaurant and cafe. on april 12 -- i'm sorry, on april 10, 2012, this commission authorized staff to put out an rfp or request for public offering for a restaurant renovation and operator. the port, we did extensive advertising, extensive
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outreach, and we received no offers. the building has been vacant for seven years. i have shown the building myself during that time. and we have received no offers. under the report's resale policy, it does require a competitive bid. if it's retail, which their proposed restaurant would follow in line with that. however, there is an exception that the policy provides for, for direct negotiations if port staff determines that a public offering would be impractical and impossible. we feel that the seven years that the property sat vacant and the fact that we did a public offering with extensive outreach, our conclusion is it is impractical and we would request your permission to do a sole source direct negotiation with bca for the premises. * some of the terms, the
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building, it's about 7 369 square feet, freestanding building. there is an adjacent paved yard of about 4200 square feet. and then about 17 parking spaces that are in front of the building and were always dedicated with the restaurant and in the rfp. so, we feel that it's proper to include those. the term would be -- i'm sorry, five years. there would be one option to extend at the port's sole discretion. the monthly rent would be 3,43 1 prior to any deductions for rent credit. there is an annual increase of 2.5%. regarding the restaurant or cafe, the port would receive 6% of revenues received from cafe sales. there is a small rent credit that's part of the lease. the port or the building has
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been vacant for seven years. it did sustain some damage during the move out of the previous tenant, so, we would like to request that. they will provide all the requisite insurance. now, down the line there may be some request for some clinical services, you know, maybe a blood draw station, which is in line with, with their mission and also with the zoning of the building. so, at this point i would request that you approve the sole source agreement with the black coalition on aids. >> so moved. >> second. >> is there any public comment? i have one question. the tenant improvement, they wish to put in 40,000? >> yes. >> that would be subject i guess for the building inspectors to make sure everything -- because the building is vacant so long.
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>> yes. >> to bring it up to code. if there should be some requirement discovered in that process, how is that going to be handled? >> that's a very good question. we have done a pre-inspection of the building and fortunately it was a prefab building. so, it was a butler building in relation to the former tenant. and the building permit was approved and it meets a-d-a, you know, all the codes are met in the building. i've reconfirmed that. their architect that they have has reconfirmed that. so, what we see is their $40,000 really repairs from a vanity missing to a toilet seat or a mirror that was damaged, a broken window, very minor issues. >> okay. so, we don't see any other -- [inaudible]. >> you know, the main thing would be a-d-a, and it's an elevation. so, there is no -- the majority of the building is elevation.
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the mezzanine is under 33%, which means there's no requirement for an elevator. >> so, is there a construction period or a period where -- >> pardon me if i didn't mention that. there's a six-month rent abatement period for purposes of doing these repairs, yeah. >> okay. so, that's why it says that the 750 will be deducted [inaudible]. >> correct. what we're proposing is a rent abatement of six months for the purpose of repairs, getting the building back up. again, it's been dormant for seven years. so, there's some system testings. you know, it was a bar. it was a club. they will reconfigure it to suit their needs. so, we think that their offer of six months plus this modest rent credit is fair for the port. >> i'm just going to ask a little more detailed question
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to be sure. so, if there is any clinical use given this is perhaps not what this facility was used in the past, that we've already confirmed that they wouldn't be any further so the building standards or whatever, because it will be used as a clinic. >> yes, correct. we've had a c-e-q-a evaluation under the california environmental quality act. so, there's no change of use. we understand their clinical procedures, which actually they out source, in this case, to the black nurses association. they will provide the space. it's very minimal. it would be yourself going to pacific medical center and, you know, for a blood test for something. so, yeah, they'll have to meet all the codes and regulations. i have to say if the building does lend itself to this type of use and not a restaurant because it is so large. so, we think it's a nice fit.
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>> i have no further questions. any other questions or other comments? all in favor? >> aye. >> okay, resolution number 12-81 has passed. >> thank you for your time. >> item 9d, request consent to the transfer of (i) lease no. l-12507 for premises located at wharf 92 and (ii) lease no. l-13438 for premises located at seawall lot 344, in connection with the purchase of 100% of the equity interests of bode concrete llc and bode gravel company by central concrete supply company, inc., a wholly-owned subsidiary of u.s. concrete, inc.. >> madam president, commissioners, [speaker not understood]. item 9d is a consent to transfer to port leases in which bode gravel company is the current port tenant.
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lease no. l-12507 and premises at seawall, 344. as you well know, the gravel company is an iconic number in san francisco. bode has been here since 1915 and waterfront for 10 year. the business is a production and distribution of ready mix concrete and other construction material to the local construction industry. it is sad for me to now say that the owners of bode now desire to sell their interest in bode and bode concrete llc to central concrete supply company, which is a wholly-owned subsidiary of u.s. concrete. under the terms of the aforementioned leases, 50% or greater interest in the tenant. in this particular case, the
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owners of bode will be transferring 100% of their equity interest to central and as such the train action requires consent from the port commission. port staff has completed its due diligence regarding the transaction and operations of both central and u.s. concrete. and the credit worthiness of both consolidatesv ha been thoroughly reviewed by the port's finance manager. additionally, port environmental staff have also completed a review of the environmental regulatory compliance of both central and u.s. concrete and found operations to be compliant. including a progressive environmental and safety record that promotes sustainability, which is evidenced by numerous awards in that area. with that, port staff recommends that the port commission consent to the transfer of the two port leases to central concrete supply company in connection with central's purchase of 100% of the equity interest in bode and
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bode concrete llc. that concludes my formal presentation. i have port staff here from finance and from environmental to answer any questions. i also have representative portman from bode and jeff davis from central concrete supply. >> so moved. >> second. >> is there any public comment? any questions, commissioners? >> you have a comment. >> sorry. >> you have to go to the mic. [speaker not understood] local 10. i just have some concern because when this facility went in about ten years ago, there was comments that they were not going to be unloading and loading vessels there. and in the meantime, that has taken place. so, i just wanted to question that, when they originally went
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into this facility it was just going to be a concrete plant. but now they're receiving both materials off of barges. so, i'm concerned about that part of the operation and if that's going to continue and the jurisdiction on that, so. >> public comment, please. yes. >> you have to come to the mic, please. thank you. it's been a long time since i've been up here. i would like to second his shirt and say "go giants." i think you got it confused with the cement plant next door which is understandable. we don't unload any material. we're a big supporter of long shore man's operation at pier 94, [speaker not understood]. i think we're their biggest customer and we don't unload any barges on our site. i don't even know if it's permitted. original lease mission valley was unloading sand barges there and they've ceased doing that.
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>> you can't come back. i was mixed up. [laughter] >> thank you. is there any further public comment? jeff, were you going to comment? >> no. >> okay. clarify the issue. well, i just wanted to comment. i do believe there is a [speaker not understood] forecast from the parent company u.s. concrete improving and obviously went through a tough time. i think it is still correct we would give support where the family wishes to sell and sell to a buyer. but we do want to just note that obviously the industry can go up and down in cycles and hopefully will not affect the ongoings of the lease transfer of this transaction going forward because it's still to be proven exactly in terms of coming out of the cycle and the
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recession that we've experienced. so, just to be on record on that and to note that, i think it's important for us to recognize that. but not to hold up the transaction in terms of the transfer of the lease. so, all in favor. >> aye. >> resolution number 12-82 has passed. >> item 10 a, information 58 update on status of port infrastructure where tenant relocation and other port obligations under the lease disposition agreement in preparation for the 34th america's cup event in 2012 and 2013. >> madam president, madam vice president, commissioners, good afternoon. i'm daly dunham with the port's special projects crew. i'm here for two item. the first is the america's cup periodic update by agreement, i'll not be presenting on that, but i'm here joined by other staff to answer any questions that you have.

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